The importance of International Maritime Centres (IMC) was brought into sharp focus during Hong Kong Maritime Week when a leading industry consultant warned relocation to a new port site alone would not address Hong Kong Port’s (HKP) competitiveness issues.

However, other delegates at the conference insisted Hong Kong could still thrive as an IMC with or without a top tier container terminal (in terms of volumes moved).

On a broader front, what has become clearer is that an increasing number of centres across the globe are competing to be a leading IMC and take a slice of the maritime pie.

Dr Jonathan Beard, Head of Transportation and Logistics, Asia, Arcadis, was speaking at an event held as part of the annual Hong Kong Maritime Week. The theme of his address was whether Hong Kong could remain a leading container hub without a thriving container port. He also speculated if the territory’s port should be relocated to enhance competitiveness.

Media speculation has been rife for several years about whether a new purpose should be found for Hong Kong’s shrinking port sector or whether the port should be relocated. Indeed, in a recent response to The Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030, the Royal Institute of Chartered Surveyors (RICS) recommended relocating the current container ports away from Kwai Chung/Tsing Yi area to another site at Kau Yi Chau. Other commentators have suggested the port, located on prime waterfront land, should be redeveloped into housing.

Beard raised an interesting point: Hong Kong has nurtured a broader maritime cluster which has blossomed in the years since the port was developed. These include ship broking, marine insurance, ship finance, legal services and maritime IT services. Many of these services are high value-adds and form an important part of Hong Kong’s economy.

To illustrate his thinking, Beard considered other global maritime capitals and how they compared in different criteria and overall ranking. According to the rankings, Singapore holds the overall top spot as a maritime capital.

Beard commented, “In terms of ranking for Ports and Logistics services, Singapore comes first. However, London retains top spot for Finance and Law and enjoys an overall top five ranking – all without a port. London has retained its maritime cluster without a port; Hong Kong could do the same.”

Source: The Leading Maritime Capitals of the World, 2017, Menon Economics, DNV GL
Source: The Leading Maritime Capitals of the World, 2017, Menon Economics, DNV GL

Hong Kong remains the world’s fifth busiest port, Beard stressed. He also explained how previous studies assessed other potential sites for the port. He insists any relocation may provide additional competitiveness, such as the facility to berth larger containerships, but weaknesses would remain. Cross-boundary connectivity to the South China hinterland is hampered by the high cost of cross-border trucking, severely damaging HKP competitiveness, Beard observed.

Beard insisted, “New port sites alone will not redress the competitiveness deficit, but will be prohibitively expensive and unlikely to be financially viable given the focus on lower-yielding ocean transhipment.”

Beard stressed the port had become globally pre-eminent without government support and its future should be dictated by private forces alone.

Other delegates at Hong Kong Maritime Week also remained optimistic about Hong Kong future role as an IMC.

Martin Rowe, managing director at Clarksons Platou Asia Limited, was unequivocal. He emphasised, “Hong Kong’s port is, of course, very important but, if one looks at other successful major maritime clusters such as Athens, London and Oslo, the role of their respective ports in comparison to their shipowning and shipping services sectors are insignificant. “

He cited Hong Kong’s strengths as a maritime cluster: its knowledgeable and professional workforce, its role as an English-speaking gateway to China, the rule of law and its global connections to the rest of Asia and the world. To illustrate this point, he stated that over half the world’s population is within five hours flight time of Hong Kong airport.

He then explained why London remains an outstanding maritime cluster without a port. He said, “Once again, it’s huge knowledge base, the rule of law, great connections and strong institutions and culture.”

Delegates at the Hong Kong Maritime Week often debate whether new IMC will emerge to challenge the dominance of London, Singapore and elsewhere.

Rowe stated, “It’s very hard to be certain. Generally, we see the ‘pendulum’ of shipping shifting from West to East, and it’s a trend which we expect to continue. Working in the ‘same time zone’ as where the business is conducted is certainly advantageous, and therefore we might expect to see the more important shipping centres located in Asia as we move towards mid-century”.

He then referred to a business takeover that could be a harbinger of the future, “The sale of the Baltic Exchange to the Singapore Stock Exchange last year (2016) is a possible forerunner of more traditional shipping institutions moving East in the future.”

He added, “South Asia and even Africa are also experiencing strong rates of growth so possibly scope for new shipping centres emerging in those areas too.”

He then issued a warning to present day top IMCs. He stressed, “No maritime cluster (or shipping organisation) can ‘rest on its laurels’. In a fast-changing world, it’s important to be constantly innovating and pushing at the boundaries of what’s possible in terms of technology and personnel to build a business that’s fit for purpose in the 21st century.”

Despite the challenges from new maritime clusters developing, Trevor Crowe, director, market research, Clarkson Research Services Limited, was keen to note how well the “West” has done in fleet ownership. He also pointed out that four of the five largest liner companies are still European.

Source: Clarksons Research

He then commented on new maritime clusters emerging. He stressed, “While a significant element of growth in the future is likely to come from expansion in developing world demand, there’s no reason why new hubs might not emerge in other maritime locations.

He added, “The big clusters of today will all fight hard to try to maintain their positions. London, for instance, has very clearly maintained a pre-eminent position in maritime law, insurance and shipbroking.”